Paychex Inc (PAYX)

Current ratio

May 31, 2025 Feb 28, 2025 Nov 30, 2024 Aug 31, 2024 May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 May 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022 May 31, 2022 Feb 28, 2022 Nov 30, 2021 Aug 31, 2021 May 31, 2021 Feb 28, 2021 Nov 30, 2020 Aug 31, 2020
Total current assets US$ in thousands 8,916,500 8,077,000 7,429,600 7,361,400 7,251,500 9,886,400 8,923,700 9,088,500 7,528,100 7,595,200 6,198,200 6,085,400 6,581,600 7,237,300 6,632,400 6,317,300 6,169,500 6,622,200 5,592,400 5,340,200
Total current liabilities US$ in thousands 6,956,300 5,799,700 5,329,200 5,343,900 5,309,100 8,000,800 7,254,400 7,343,500 5,805,400 5,958,100 4,753,900 4,702,200 5,269,200 5,687,900 5,221,900 4,957,900 4,938,200 5,356,000 4,380,000 4,263,100
Current ratio 1.28 1.39 1.39 1.38 1.37 1.24 1.23 1.24 1.30 1.27 1.30 1.29 1.25 1.27 1.27 1.27 1.25 1.24 1.28 1.25

May 31, 2025 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $8,916,500K ÷ $6,956,300K
= 1.28

The analysis of Paychex Inc.'s current ratio over the period from August 2020 to May 2025 indicates a generally stable liquidity position with some fluctuations. The current ratio, which measures the company's ability to meet short-term obligations with its short-term assets, primarily fluctuated within a narrow range of approximately 1.23 to 1.39 throughout the observed period.

Initially, in August 2020, the ratio stood at 1.25, suggesting that the company's current assets were 1.25 times its current liabilities. This value slightly increased to a peak of 1.39 in early 2025, reflecting a phase of improved short-term liquidity. Notably, there are periods of minor decline, such as from a high of 1.39 in February 2025 down to 1.23 in November 2023, but these are still above the critical threshold of 1.0, indicating that the company generally maintained sufficient short-term assets to cover its liabilities.

Throughout this timeframe, the ratio demonstrated a relatively steady trend with incremental increases, notably reaching the highest point of 1.39 in early 2025. The upward movement suggests a potential enhancement in liquidity management or an increase in current assets relative to current liabilities. Conversely, the dips, such as the ratio falling to approximately 1.24–1.25 in 2020 and mid-2023, do not imply significant liquidity concerns, given the ratio remained comfortably above 1.0.

Overall, Paychex Inc. exhibits a consistent and prudent liquidity position, with the current ratio reflecting prudent financial management, adequate short-term asset coverage, and limited volatility over the examined period. This stability indicates a manageable short-term liquidity risk profile, supporting the company's operational flexibility and financial stability in the analyzed timeframe.